India clarifies taxation of indirect transfers of assets abroad

Share on LinkedIn0Share on Facebook0Tweet about this on TwitterShare on Google+0Buffer this pageEmail this to someone

India on December 21 set out a series of questions and answers clarifying the taxation of provisions on indirect transfers of assets.

The 19 question and answers were prepared by a working group of the Central Board of Direct Taxes.

They clarify rules, set out in Section 9 of the Income Tax Act, 1961, which provide that if a share or interest in a foreign company or entity derives its value ‘substantially’ from assets located in India, the transfer would be subject capital gains tax in India.

See:

  • Circular41 of 2016